Frasers Logistics & Industrial Trust

Transcription

1 Frasers Logistics & Industrial Trust Investor Presentation 1 Burilda Close, Wetherill Park, New South Wales February 2017

2 Important Notice This presentation is for information purposes only and does not constitute or form part of an offer, solicitation, recommendation or invitation for the sale or purchase or subscription of securities, including units in Frasers Logistics & Industrial Trust ( FLT, and the units in FLT, the Units ) or any other securities of FLT. No part of it nor the fact of its presentation shall form the basis of or be relied upon in connection with any investment decision, contract or commitment whatsoever. The past performance of FLT and Frasers Logistics & Industrial Asset Management Pte. Ltd., as the manager of FLT (the Manager ) is not necessarily indicative of the future performance of FLT and the Manager. This presentation contains forward-looking statements that involve assumptions, known and unknown risks and uncertainties which may cause the actual results, performance, outcomes or achievements of FLT or the Manager, or industry results, to be materially different from those expressed in such forward-looking statements. Such forward-looking statements are based on certain assumptions and expectations of future events regarding FLT's present and future business strategies and the environment in which FLT will operate. The Manager does not guarantee that these assumptions and expectations are accurate or will be realised. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager s current view of future events. The Manager does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise, subject to compliance with all applicable laws and regulations and/or the rules of the Singapore Exchange Securities Trading Limited ( SGX-ST ) and/or any other regulatory or supervisory body or agency. The information and opinions in this presentation are subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning FLT. None of Frasers Centrepoint Limited, FLT, the Manager, Perpetual (Asia) Limited, in its capacity as trustee of FLT, or any of their respective holding companies, subsidiaries, affiliates, associated undertakings or controlling persons, or any of their respective directors, officers, partners, employees, agents, representatives, advisers or legal advisers makes any representation or warranty, express or implied, as to the accuracy, completeness or correctness of the information contained in this presentation or otherwise made available or as to the reasonableness of any assumption contained herein or therein, and any liability whatsoever (in negligence or otherwise) for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation is expressly disclaimed. Further, nothing in this presentation should be construed as constituting legal, business, tax or financial advice. The value of Units and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in the Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that they have no right to request the Manager to redeem their Units while the Units are listed. It is intended that holders of Units may only deal in their Units through trading on the SGX- ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. Nothing in this presentation constitutes or forms a part of any offer to sell or solicitation of any offer to purchase or subscribe for securities for sale in Singapore, the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. 2

3 Contents Overview Results Highlight for the Quarter ended 31 December 2016 Sponsor Strategic Objectives and Market Update 3

4 OVERVIEW 8 Distribution Place, Seven Hills, New South Wales

5 Portfolio Overview Prime Properties Concentrated In Major Industrial Markets In Australia 54 PROPERTIES Melbourne (Victoria) Properties 26 Sydney (New South Wales) Properties 13 (2) GLA 569,829 sq m GLA 380,430 sq m Valuation A$671.2m Valuation A$514.9m % of Portfolio (1) 38.7% % of Portfolio (1) 29.6% Brisbane Perth Sydney Adelaide Melbourne Brisbane (Queensland) Properties 10 Adelaide (South Australia) Properties 4 Perth (Western Australia) Properties 1 GLA 224,673 sq m GLA 33,038 sq m GLA 20,143 sq m Valuation A$497.1m Valuation A$35.2m Valuation A$18.2m % of Portfolio (1) 28.6% % of Portfolio (1) 2.0% % of Portfolio (1) 1.0% (1) By valuation (2) 12 properties located in Sydney, 1 property is located in Wollongong 5

6 Portfolio Concentrated in Major Industrial Markets - Melbourne FLT s properties in Melbourne are primarily located in the West and South East industrial precinct and are able to service the Port and large South Eastern residential population base New South Wales Map of Melbourne Sub-market Location No. of Properties Precinct Characteristic South Australia E D New South Wales South East North D 6 A 5 Access to M1 (Monash Freeway) and M3 (Scoresby Freeway) B 6 Services the large South Eastern residential C 2 population base Access to key freeways, including the Tullamarine Freeway, Citylink Tollway, Western Ring Road and Tullamarine Airport and north to Sydney via the Hume Highway F G West E 5 Close to the shipping port and access to the M1, Geelong Road, M80 Western Ring Road South Australia A A B B South Park Industrial Estate South Park Industrial Estate The Keys Industrial Park The Keys Industrial Park E F C B A E West Park Industrial Estate West Park Industrial Estate F Altona Industrial Park Altona Industrial Park New South Wales City Fringe F 1 G 1 Access to the M1 (Westgate Freeway) linking it to the West precinct Supply is constrained. Alternative use is strong competition for development in neighbouring suburbs. Rezoning and residential redevelopment is re-shaping the precinct C C D D Clayton South & Mulgrave Clayton South & Mulgrave Melbourne Airport Business Park Melbourne Airport Business Park G G Port Melbourne Port Melbourne Total 26 Source: The Independent Market Research Consultant 6

7 Portfolio Concentrated in Major Industrial Markets - Sydney FLT s properties in Sydney are well-connected to major freeways, Sydney Port and are able to service growing population in the North West Queensland Map of Sydney Sub-market Location No. of Properties Precinct Characteristic South Australia A C DC B DE Outer Central West Outer North West A 4 Excellent access to key motorways, including M7, M4 and other main arterial roads B 2 C 1 D 3 E 1 Third-party logistics ( 3PL ), retail and wholesale distribution centres for key brand name operators are located in this precinct Close to M2 and M7 and access to the large and growing North West population corridor Supply is moderately constrained sites suit smaller development or alternative use, larger sites available in Marsden Park (1) Outer South West F 1 Access to the M5 and South Sydney/Port, the Southern Sydney Freight Line and Moorebank Intermodal terminal EF Victoria Victoria Port Kembla (Wollongong) N.A. 1 One of the three major trade ports within New South Wales and is situated within the southern industrial city of Wollongong A A B Eastern Creek Eastern Creek Pemulwuy D Seven Hills BC D C E Seven Pemulwuy Hills Winston Hills Wetherill Park Smeaton Grange E F Winston Hills Smeaton Grange Total 13 Source: The Independent Market Research Consultant. (1) Marsden Park is a suburb of Sydney, in the state of New South Wales, Australia. Marsden Park is located 49 km north-west of the Sydney central business district, in the Blacktown local government area and is part of the Greater Western Sydney region. 7

8 Portfolio Concentrated in Major Industrial Markets - Brisbane FLT s properties in Brisbane are primarily concentrated in the Southern sub-market, which has good road linkages to the north, west and south to the Gold Coast residential population Northern Territory JI HI Map of Brisbane Sub-market Southern No. of Location Properties A 1 B 1 C 1 D 1 E 1 F 1 G 1 H 1 Precinct Characteristic Largest geographical industrial precinct that has good road linkages to the north, west and south to the Gold Coast residential population New South Wales F Close to key infrastructure, including Port of Brisbane and the Brisbane Airport AA B B C CD Flint Street Flint Street Boundary Road Boundary Road Siltstone Place Siltstone Stradbroke Place Street B A D F G H G C E F Shettleston Street Shettleston Street G Sandstone Place Sandstone Place H Queensport Road Pearson I Earnshaw Road Road H New South Wales Trade Coast I 1 Northern J 1 Total 10 Access north and south via the M1 Supply is constrained. Alternative use is strong competition for development in neighbouring suburbs Services the population to the North of Brisbane via the Gympie Road, Bruce Highway and Houghton Highway Limited availability of development land E D Platinum Street Stradbroke Street I Queensport Road E Platinum Street J Earnshaw Road Source: The Independent Market Research Consultant 8

9 Concentrated in Major Industrial Markets FLT s properties are concentrated in Australia s top three logistics markets with strong connectivity to key infrastructure Geographical Breakdown by Gross Lettable Area, Net Property Income & Value SA 2.7% WA 1.6% SA 3.1% WA 1.4% SA 2.0% WA 1.0% VIC 46.4% GLA NSW 31.0% VIC 41.8% NPI (1) NSW 27.7% VIC 38.7% Value NSW 29.6% QLD 18.3% QLD 26.1% QLD 28.6% (1) For the period from the listing to December 2016, adjusted by straight lining rental adjustments 9

10 Predominantly Freehold, Long Leasehold and Young Portfolio 89.6% of FLT s portfolio comprised of freehold and long leasehold land tenure assets 75.5% of FLT s portfolio is less than 10 years old with lower capital expenditure requirements Land Tenure by Value (1) Portfolio Age by GLA (2) Modern Properties Lot 6 Kangaroo Avenue, Eastern Creek, NSW Lot 1 Pearson Road, Yatala, QLD Other Leasehold 10.4% > 10 Yrs 24.5% <2 Yrs 29.6% > 80 Year Leasehold 32.0% Freehold 57.6% 2-5 Yrs 6.9% 111 Indian Drive Keysborough, VIC Wellington Road Mulgrave, VIC 5-10 Yrs 39.0% (1) Valuation as at 30 September 2016 (2) As at 31 December

11 Well-diversified Tenant Base Top Ten Tenants (By Gross Rental Income for the month of Dec 2016) % of GRI WALE (Years) Coles Schenker Breakdown of Tenants By Trade (By Gross Rental Income for the month of Dec 2016) Manufacturing 18.2% Others 7.2% Consumer 41.7% CEVA Logistics Toll Holdings TTI Martin Brower Mazda H.J. Heinz DHL Global Forwarding Unilever Logistics 32.9% Consumer sector tenants Logistics sector tenants 11

12 Portfolio Lease Expiry Profile No concentration risk of lease expiry (no single year accounts for more than 20% lease expiry in the next 9 years) Minimal lease expiries over next 12 months Only 4.1% lease expiries over the next 24 months Provides stability of cash flows Lease Expiry by Gross Rental Income(¹) 27.1% 19.8% 21.8% 15.3% 3.5% 10.7% 5.9% 12.8% 12.6% 10.1% 12.7% 10.8% 8.0% 4.0% 8.0% 6.3% 3.5% 5.6% 0.0% 0.4% 0.6% 0.5% Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Dec 2024 Dec 2025 Dec 2026 Dec 2016 IPO (as disclosed in Prospectus) and beyond (1) Excluding straight lining rental adjustments 12

13 Proactive Lease Management Management continues to proactively engage with tenants well before lease expiry For the quarter ended 31 December 2016, 56,108 sq m of new lease and lease renewals were executed Since FLT s listing, 108,657 sq m of new lease and lease renewals have been executed New Lease /Renewal Tenant Industry Property GLA (m 2 ) Renewal Australia Post Logistics Renewal Smith Lewis Logistics 5 Butler Boulevard, Adelaide Airport SA Jets Court, Melbourne Airport VIC New expiry date 3,035 Sep ,822 Mar 2020 Renewal BIC Consumer 17 Pacific Drive & Atlantic Drive, Keysborough VIC 12,126 Jun 2019 Renewal Toll Logistics Renewal RF Industries Manufacturing New Lease 2-46 Douglas Street, Port Melbourne VIC 99 Station Road, Seven Hills NSW 18,541 Oct ,772 Mar 2022 Tailored Packaging (1) Consumer 32 Gibbon Road, Winston Hills NSW 7,812 Apr 2025 (1) The lease was signed in January 2017 and replaces an existing lease surrendered by Australian Geographic Retail Pty Ltd. 13

14 Commitment to Environment Sustainability FLT has the largest industrial Green Star performance rated portfolio in Australia 59 tenancies across 48 properties have achieved Green Star Performance ratings FLT s Green-rated status (By GLA) (1,2) Sustainability benefits Design Review, 6.6% Not rated, 22.6% Reduces ongoing occupancy costs Gaining new tenants, especially those using sustainability as a criteria Performance rated, 70.8% Assists in retaining tenants at lease expiry Decreases building obsolescence Sustainability initiatives Minimises vacancy downtime 1 First industrial facility in 2 Queensland to achieve a 6 Star Green Star Design rating LED lighting to warehouse and office areas Certified 6 Star Green Star Design rating Rooftop Solar PV system to generate renewable energy for use on site Lot 1 Pearson Road, Yatala, Queensland 1 Burilda Close, Wetherill Park, New South Wales (1) Green Star rating is awarded by the Green Building Council of Australia (GBCA) which has assessed the Properties against nine key performance criteria energy, water, transport, materials, indoor environment quality, management, land use & ecology, emissions and innovation (2) As at 31 December

15 FINANCIAL HIGHLIGHTS 51 Stradbroke Street, Heathwood, Queensland

16 FLT Snapshot For the Financial Quarter Ended 31 December 2016 A$24.9 mil Distributable Income 5.1% Above Forecast 1.74 Singapore Cents DPU (1) 6.1% Above Forecast A$1.74 billion Portfolio Value A$1.60 billion at IPO 29.7% Aggregate Leverage Available headroom for growth 0.6% Lease Expiries By December % Occupancy 6.9 years WALE 6.5 years Portfolio Age 98.3% at IPO Same as at IPO 6.1 years at IPO (1) Distributions will be made on a semi-annual basis for the six-month periods ending 31 March and 30 September 16

17 Highlights for the Quarter Ended 31 December 2016 Distributable Income up 5.1% to A$24.9 million Adjusted NPI (1) was 0.6% lower than Forecast due mainly to the delay in the acquisition of the Martin Brower property Finance costs 21.2% lower than Forecast at A$4.1 million backed by a lower weighted average interest rate of 2.8% (2) per annum Portfolio Value up 8.8% to A$1.74 billion Completion of Martin Brower acquisition in November 2016 enlarged the FLT portfolio to 54 properties GLA of approximately 1.2 million sq m 89.6% of FLT s portfolio comprised of freehold and long leasehold land tenure assets 75.5% of FLT s portfolio is less than 10 years old Success in lease management 56,108 sq m of new lease and lease renewals executed (3) Long WALE and High Occupancy WALE of 6.9 years Occupancy at 99.3% Distribution Per Unit Growth Exceeded Forecast by 6.1% 1.74 Singapore cents for the quarter (4) (1) Net property income excluding straight lining rental adjustments is A$30.7m (2) Excluding upfront debt related expenses (3) Includes the lease to Tailored Packaging which was signed in January 2017 (4) Distributions will be made on a semi-annual basis for the six-month periods ending 31 March and 30 September 17

18 Financial Performance (Quarter ended 31 December 2016) (A$ 000) Actual Forecast (1) Variance (%) Contributing factors Gross revenue 39,678 40,290 (1.5) Adjusted net property income (2) 30,666 30,856 (0.6) Variance from Forecast is mainly due to the delay in acquiring the Martin Brower call option property Finance costs (4,098) (5,198) 21.2 Interest savings from lower actual weighted average interest rate of 2.8% (3) per annum compared to Forecast weighted average interest rate of 3.4% (3) per annum Lower debt by A$20 million for the Martin Brower acquisition as compared to Forecast Distributable income to Unitholders DPU (Singapore cents) 24,877 23, Due mainly to interest savings (1) The Forecast figures for the quarter ended 31 December 2016 ( Quarter Forecast ) have been proportionally pro-rated from the Projection for the Enlarged Portfolio for Projection Year 2017 (1 October 2016 to 30 September 2017) (which takes into account the acquisition of the three Call Option Properties) which are set out in the Prospectus (2) Net property income excluding straight lining rental adjustments (3) Excluding upfront debt related expenses 18

19 Financial Performance (Financial Period ended 31 December 2016) (A$ 000) Actual (1) Forecast (2) Variance (%) Contributing factors Gross revenue 82,729 83,005 (0.3) Adjusted net property income (3) 63,409 63,591 (0.3) Variance from Forecast is due mainly to the delay in acquiring the Martin Brower call option property Partially offset by rental income contribution from the vacant lettable area at Lot 5 Kangaroo Avenue which was tenanted from April 2016 and the acquisition of the two call option properties (Indian Drive and Pearson Road Properties) one month ahead of Forecast Finance costs (8,003) (9,680) 17.3 Interest savings from lower actual weighted average interest rate of 2.8% (4) per annum compared to Forecast weighted average interest rate of 3.4% (4) per annum Lower debt by A$20 million for the Martin Brower acquisition as compared to Forecast Distributable income to Unitholders DPU (Singapore cents) 51,279 49, The higher distributable income is mainly from leasing activities and interest savings (1) The Actual results for the FLT Group for the financial period from 30 November 2015 (date of constitution) to 31 December 2016 comprises the actual results for the quarter ended 31 December 2016 and (i) in respect of the non-queensland Properties, 108 days of operation from 14 June 2016 to 30 September 2016; and (ii) in respect of the Queensland Properties, 102 days of operation from 20 June 2016 to 30 September Please refer to Note 1 in Paragraph 9 of FLT s Financial Statements Announcement dated 3 February 2017 for details (2) The Forecast figures for the financial period from 30 November 2015 (date of constitution) to 31 December 2016 comprises (i) the Quarter Forecast and (ii) the Forecast figures for the period from 20 June 2016 to 30 September Please refer to Note 1 in Paragraph 9 of FLT s Financial Statements Announcement dated 3 February 2017 for details (3) Net property income excluding straight lining rental adjustments (4) Excluding upfront debt related expenses 19

20 Distributable Income Quarter ended 31 Dec 2016 (A$ 000, 1 October 2016 to 31 December 2016) Financial Period ended 31 Dec 2016 (A$ 000, 20 June 2016 to 31 December 2016) 3.6% 5.1% $23,664 $24,877 $49,484 $51,279 Forecast (1) Actual Forecast (2) (3) Actual (1) The Forecast figures for the quarter ended 31 December 2016 have been proportionally pro-rated from the Projection for the Enlarged Portfolio for Projection Year 2017 (1 October 2016 to 30 September 2017) (which takes into account the acquisition of the three Call Option Properties) which are set out in the Prospectus (2) The Forecast figures for the financial period from 30 November 2015 (date of constitution) to 31 December 2016 comprises (i) the Quarter Forecast and (ii) the Forecast figures for the period from 20 June 2016 to 30 September Please refer to Note 1 in Paragraph 9 of FLT s Financial Statements Announcement dated 3 February 2017 for details (3) The Actual results for the FLT Group for the financial period from 30 November 2015 (date of constitution) to 31 December 2016 comprises the actual results for the quarter ended 31 December 2016 and (i) (in respect of the non-queensland Properties) 108 days of operation from 14 June 2016 to 30 September 2016; and (ii) (in respect of the Queensland Properties) 102 days of operation from 20 June 2016 to 30 September Please refer to Note 1 in Paragraph 9 of FLT s Financial Statements Announcement dated 3 February 2017 for details 20

21 Balance Sheet Value of investment properties has increased 8.8% from A$1.60 billion at IPO to A$1.74 billion as at 31 December 2016 due mainly to acquisition of the three call option properties (A$ 000) As at 31 Dec 2016 Investment properties 1,742,646 Current assets 67,667 Total assets 1,815,247 Non-current liabilities 539,094 Current liabilities 19,334 Total liabilities 558,428 Net asset value per Unit (A$)

22 Capital Management As at 31 December 2016: Weighted average cost of borrowings is 2.8%(¹) per annum Healthy interest cover ratio of 9.0 times No near term refinancing risks Low gearing level of 29.7% Available debt headroom of A$503 million to reach 45.0% aggregate leverage limit Established a S$1 billion multicurrency debt issuance programme to provide flexibility in its financing options for future acquisitions Debt Composition Floating VS Hedged Debt Maturity Profile (A$ m) Floating 22% $170 $160 $120 Fixed 78% No debt expiry in FY2017 and FY2018 $90 Total Gross Borrowings A$540 million FY2017 FY2018 FY2019 FY2020 FY2021 Revolving Credit Facility Term Loan (1) Excluding upfront debt related expenses 22

23 SPONSOR 77 Atlantic Drive, Keysborough, Victoria

24 Sponsor: Frasers Centrepoint Limited A Leading International Real Estate Company One of Singapore s top property companies with total assets of S$25b (1) Multi-segment expertise industrial, residential, retail, office, business space properties and hospitality Engaged in the entire real estate value chain One of the Top Residential Developers in Singapore One of the Largest Retail Mall Owners / Operators in Singapore Leading Australian Multi-segment Developer and Owner/Operator Globally Scalable Hospitality Operator (1) As at 31 December

25 Frasers Property Australia Leading Integrated Industrial Player FPA (previously Australand ) is a significant diversified property group in Australia with ~S$3.6b in total assets as at 31 December 2016 FPA became wholly-owned by the FCL Group in October 2014 and the creation of FLT to be a strategic partner in the industrial sector is a key objective for both FPA and FCL The industrial business line is of significant importance to FPA, representing approximately one-third of FPA s asset base FPA S COMPLETE IN-HOUSE VALUE CHAIN Opportunity Identification and Development Asset and Property Management Funds Expertise Strong Industrial Delivery Capabilities Proven Asset Management Track Record Unparalleled Funds Expertise Consistent market leader in industrial D+C market with c.15% - 25% market share (1) A$3.5b of assets and 3.1 million sq m built form completed (2) 100% of IPO portfolio developed inhouse Industrial development pipeline with an on completion value of A$850m In-house construction and delivery platform, a key point of difference vs. competitors End to end from lease negotiation to property and facilities management Tenant retention rate of 81.0% (3) Approx. 50% repeat business Seven previous funds/jvs managed by Frasers Property Australia since 2001 Gross value of funds managed is approximately A$1.7b Strong track record of delivering healthy returns Source: Company, The Independent Market Research Consultant. (1) FPA market share was not calculated in 2013 and 2014 and in 2008 and 2009 was a combined 15% average across both years. (2) Since (3) Retention rate is for FLT portfolio from

26 Alignment of Interest between the Sponsor, REIT Manager and Unitholders The substantial interest of the Sponsor in FLT aligns the Sponsor and Unitholders interest. Management fee structure aligns the REIT Manager and Unitholders interest. Substantial Sponsor ownership in FLT REIT Manager Fee structure The Sponsor is the largest Unitholder in FLT Sponsor ownership of 20.7% Management Fee Base Fee Fee Structure 0.4% p.a. of Deposited Property Substantial strategic investment in FLT Performance Fee 5.0% p.a. of Distributable Income Total REIT Management Fee for FP2016 (annualised): 0.64% of Deposited Properties TCCG has committed 6.3% as a strategic investor Standard moratorium on the Sponsor s and TCCG s stakes 100% base fee and performance fee in units for the FP2016 and PY2017 to align interest of REIT manager and unitholders Performance fee structure incentivises the REIT Manager to grow distributable income and DPU 26

27 STRATEGIC OBJECTIVES AND MARKET UPDATE Lot 1 Pearson Road, Yatala, Queensland

28 Key Developments Since IPO Aug 2016: Acquisition of Indian Drive and Pearson Road Call Option Properties Acquisitions accretive to DPU Listed on the SGX- ST on 20 June 2016 Initial Portfolio: 51 properties in Australia 111 Indian Drive, Keysborough, Victoria Lot 1 Pearson Road, Yatala, Queensland Pearson Road Property is the first industrial facility in Queensland to achieve a 6 Star Green Star Design rating Jun 2016 Aug 2016 Nov 2016 Jun 2016: Completion of Development Properties Nov 2016: Acquisition of Martin Brower Call Option Property Doriemus Drive, Truganina, Victoria Schenker Extension and CEVA Logistic completed on 24 and 30 June 2016 respectively Ahead of targeted completion date of July 2016 as originally stated in the Prospectus 1 Burilda Close, Wetherill Park, New South Wales 1 Burilda Close, Wetherill Park, New South Wales Prime, new industrial facility with 20-year lease longest in FLT s Portfolio Certified 6 Star Green Star Design Rating Since Listing: 108,657 sq m of new lease and lease renewals (1), representing 8.8% of total Portfolio GLA (1) Includes the lease to Tailored Packaging which was signed in January

29 Strategic Objectives Deliver stable and regular distributions to unitholders Achieve long term growth in DPU 3.2% average annual built-in rental increments ROFR from Sponsor - 14 existing properties - Development pipeline Third-party acquisitions Optimal capital mix and prudent capital management Asset Enhancement Initiative (AEI) potential 29

30 Market Update Macroeconomic Stronger economic growth is forecast to resume despite the negative GDP (-0.50%) in 3Q16. The main factors contributing to the decline were falling housing investment and government investment, which were affected by one-off factors including significant growth in 2Q16 and a very wet Victorian winter. The RBA official cash rate remains at 1.50% Unemployment rate remains below 6% Australian government 10 year bond yields currently at 2.7% annualised Measures of consumer sentiment remain above average (%) Australia GDP Annual Growth Rate (%) Australian Cash Rate Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q Sources: Reserve Bank of Australia Monetary Policy Decision (6 December 2016); Australian Bureau of Statistics (December 2016) 30

31 Market Update Industrial market Occupier demand continues to be well supported by dwelling pipeline (although this is beginning to slow after a 5-year boom), government infrastructure spending and export growth with lower AUD Demand continues to be driven by third-party logistics, retail goods and e-commerce Quality industrial assets remain in demand predominantly by unlisted funds, investment managers and strong foreign investment, which remains competitive given their lower cost of capital Investor demand for prime grade industrial stock remains strong across the country with a focus on Sydney and Melbourne The strongest investor interest continues to be in new large-scale distribution centres with long WALEs Prime yields remain at the historically low levels Sources: Reserve Bank of Australia Monetary Policy Decision (6 December 2016); Australian Bureau of Statistics (December 2016); The Westpac/Melbourne Institute Index of Consumer Sentiment 31

32 THANK YOU 32 Gibbon Road, Winston Hills, New South Wales Investor relations contact Mr. Ng Chung Keat Frasers Logistics & Industrial Asset Management Pte. Ltd. Website: 30 Flint Street, Inala, Queensland 32

33 Prime grade net face rent A$psm p.a. Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Appendix: Update of Major Industrial Markets Melbourne Supply: Supply levels are slightly above long term average as developers continue to secure pre-lease projects in western Melbourne Demand: Take up levels have been increasing with good pre-lease demand as a result of occupier consolidation into larger, new facilities Rents: Overall rental rates remain stable with some evidence of rental growth in the South East; incentives continue to remain at elevated levels Vacancy: Vacancy levels remain high, underpinned by an increase in backfill options as a result of pre-lease activities SQM ('000s) Melbourne Industrial Supply for Prime Grade (As at Q4 2016) Melbourne Prime Grade Net Face Rents (As at Q4 2016) $78 $84 $86 $83 $84 $84 $87 $88 $89 $89 $90 Completed 10 year annual average Sources: Jones Lang LaSalle Real Estate Intelligence Service Melbourne Industrial Final Data 4Q16; Jones Lang LaSalle Real Estate Intelligence Service Melbourne Industrial Snapshot 4Q16; Jones Lang LaSalle Real Estate Data Solution Melbourne Construction Projects from 1Q06 to 4Q16 33

34 Prime grade net face rent $psm p.a. Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Appendix: Update of Major Industrial Markets Sydney Supply: Sydney is experiencing rising development activities with supply levels marginally below long term average and challenges with securing new land banks Demand: Demand is supported by major infrastructure projects across Metropolitan Sydney and a strong NSW economy Rents: Rental rates have been rising and incentives are relatively lower compared to other markets Vacancy: Levels of available prime grade space remain significantly below long term averages SQM ('000s) 1, Sydney Industrial Supply for Prime Grade (As at Q4 2016) Sydney Prime Grade Net Face Rents (as at Q4 2016) $111 $113 $112 $109 $111 $114 $118 $121 $121 $123 $126 Completed 10 year annual average Sources: Jones Lang LaSalle Real Estate Intelligence Service Sydney Industrial Final Data 4Q16; Jones Lang LaSalle Real Estate Intelligence Service Sydney Industrial Snapshot 4Q16; Jones Lang LaSalle Real Estate Data Solution Sydney Construction Projects from 1Q06 to 4Q16 34

35 Prime grade net face rent $psm p.a. Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Appendix: Update of Major Industrial Markets Brisbane Supply: Supply levels remain well below long term average but developers are anticipated to deliver more pre-committed and speculative space due to improving demand for quality space Demand: Demand levels have been improving with tenant preference for newly constructed facilities and limited demand for secondary space Rents: Effective rental rates remain under downward pressure with more entrenched incentive levels Vacancy: Vacant space has been increasing as tenants favour new supply at the expense of existing, secondary facilities SQM ('000s) Brisbane Industrial Supply for Prime Grade (As at Q4 2016) Brisbane Prime Grade Net Face Rents (As at Q4 2016) $114 $116 $113 $117 $119 $120 $119 $119 $117 $117 $ Completed 10 year annual average Sources: Jones Lang LaSalle Real Estate Intelligence Service Brisbane Industrial Final Data 4Q16; Jones Lang LaSalle Real Estate Intelligence Service Brisbane Industrial Snapshot 4Q16; Jones Lang LaSalle Real Estate Data Solution Brisbane Construction Projects from 1Q06 to 4Q16 35